- The number of business applications dropped 15.6% in May 2022 — the biggest year-over-year decline this year. Nearly 78,000 fewer business applications were filed in May 2022 than in May 2021. This eclipsed the 13.5% year-over-year drop between April 2021 and April 2022.
- 42 states saw business applications decrease, with 24 states dropping by double digits. Louisiana (31.2%), Ohio (30.2%) and Mississippi (29.8%) saw the biggest dips. Six other states also saw drops above 20%.
- On the other hand, nine states saw business applications increase — but only four by double digits. Vermont (19.6%), Idaho (15.9%), Alaska (14.5%) and Wyoming (10.6%) were the double-digit risers.
- Some of these potential new businesses may be empty economic calories. Researchers earlier in the pandemic saw an uptick in business applications but smaller growth among what the U.S. Census Bureau calls high-propensity business applications (HBAs). These are a subset of business applications with a high likelihood of the business transitioning into one with payroll. In May 2022, the year-over-year drop in the number of applications deemed high propensity was 13.8%.
LendingTree researchers looked at the number of new business applications filed in each state in May 2022 compared to May 2021. To rank the states, researchers found the percentage change in business applications between the two periods.
Business applications — per 2021-22 data from the U.S. Census Bureau — are defined as all applications for an Employer Identification Number (EIN), except for applications for tax liens, estates and trusts.
Researchers also looked at high-propensity business applications (HBAs), a subset of business applications with a high likelihood of the business transitioning into one with payroll.